New York is making Uber pay a living wage – UK workers deserve the same

10 August 2018

The fightback against poverty wages and exploitation in the gig economy has, until now, taken place almost exclusively in the courts. But a new front is beginning to open up in the attack on these abysmal working practices. Throughout this war of attrition between David and Goliath, the legal system has helped to balance the scales between individual workers and the trade union movement, on one side, and some of the biggest companies in the gig economy, on the other.

In doing so, it has played a crucial role in extending basic forms of protection, such as the minimum wage, sick pay and holiday pay, to workers at companies such as Uber, Hermes and Pimlico Plumbers who had previously been denied any protection because of their “self-employed” status.

But behind these breakthroughs lies an uncomfortable truth. The onus in each case has been on the workers themselves to take on the big boys of the boss class, as they are left exposed by a lack of protection from the state. A huge amount of courage has been required from those workers seeking to secure the basic rights that most of us take for granted. The politicians with the power to lead the fightback against sub-minimum pay and conditions have failed to extend and enforce statutory protection for this small army who toil away in the gig economy.

Hence the troubling findings we have unearthed in a series of inquiries by the Commons work and pensions committee over the past two years, of different groups of workers taking home as little as £2 an hour, being on the receiving end of inhumane treatment, and struggling to feed their families despite working all the hours God sends (and occasionally even more). That might be about to change – this week, in the US, the fightback well and truly entered the political arena. The package of reforms approved on Wednesday by New York city council will set a gold standard for the protection of workers in the gig economy. It guarantees app-based drivers a living wage and deals with one of the chief causes of low and volatile earnings: the flooding of the market with a surplus of drivers.

This major development sends a clear message to the gig economy’s biggest companies: until now, you have not had to pay a fair price for the abundant supply of labour that is at the heart of your business model. This model has been subsidised by chronically low wages and appalling working conditions for too many drivers, riders and couriers. From now on that subsidy will not be available. If you wish to continue offering passengers a first-class service, you will need to make more efficient use of your drivers – under your present model, with such a large surplus of drivers, many workers spend prolonged periods of time in their car waiting to be allocated a fare. They are at your disposal but, as they are not being used, they are not being paid.

Such a radical change of approach in New York will revolutionise life at the bottom of the labour market, by offering tens of thousands of workers greater security of income, necessitating more efficient business models, and ensuring the taxi and private hire trade operates on a more level playing field. Innovation and entrepreneurialism will still be encouraged, but no longer at the expense of workers’ living standards.

The time is long overdue for that approach to be replicated in Britain. Eighteen months ago, we proposed to Transport for London a series of measures to guarantee Uber drivers a living wage and prevent the flooding of the market. Despite receiving cross-party backing from the London assembly, the proposal has yet to be implemented. We have written this week to the mayor of London, Sadiq Khan, asking him to bring the city up to New York’s gold standard by implementing our proposal. While the utmost care must be taken not to stifle the dynamism and flexibility that attracts a growing number of people to work in the gig economy, our country desperately needs a set of minimum standards below which companies are not permitted to operate.

Although the private hire industry represents a natural starting point, given this week’s events in New York, the opportunity of guaranteeing workers a living wage and dealing with the downward forces on pay and security must be seized in other parts of the gig economy. For example, we are suggesting to Deliveroo that if it offers riders less than a certain number of orders in a given period of time, despite them being readily available for work, it should guarantee an adequate rate of pay.

The redistribution of risk and the introduction of greater security at the bottom of the labour market is long overdue. It is now over to politicians to follow New York’s lead in rescuing the living standards of some of the lowest-paid people in society.

• Frank Field, Labour MP for Birkenhead, is chair of the Commons work and pensions committee